Hindustan Unilever Ltd (HUL) is still in the doldrums, all the more so this time around.

To be sure, nobody expected volume growth to be spectacular. The Street had estimated volume growth at 2-3% for the September quarter. But HUL fell short of even those modest expectations. Volume actually declined 1% for the quarter, comparing unfavourably with the 4% growth seen in the previous two quarters.

In the fabric wash category, growth was led by the premium segment as Surf performed well. Vim liquid did well in the household care category. Refreshments revenues grew at a much faster pace of 8.4%, as tea products did well, but that wasn’t enough for the company as a whole.

HUL’s overall revenue increased by a mere 1.6% to Rs8,480 crore (inclusive of excise duty). A decline in advertising and promotion expenses helped operating profit performance. Operating profit increased 5% to Rs1,404.62 crore. But this is not going to help the stock. Kotak Institutional Equities and Motilal Oswal Securities Ltd had estimated operating profit at Rs1,431 crore and Rs1,503 crore, respectively.

In a post-results conference call, the HUL management acknowledged its performance has been worse than what it had anticipated.

The good news is that it believes the worst is behind it. A recovery in the markets led by a good monsoon is expected to boost the company’s sales to some extent. But that’s not happening tomorrow. Volume recovery is going to be a painfully slow process, said an analyst, who will prune his numbers after the results.

Investors have no choice but to wait, and expensive valuations don’t help. The HUL stock trades at about 40 times this year’s estimated earnings.

For the half year to September, the company’s pre-tax earnings increased 6.5% on a year-on-year basis. Clearly, earnings will have to grow at a much faster clip for investors to justify these valuations.